Poor power supply hindering growth of Nigerian SMEs

Access to power expands the number and variety of business and job opportunities available. Electricity means that small businesses, such as barbers hairdressing salons, laundromats, welders etc, rely on energy to function. Energy also leads to the creation of new markets, businesses and job openings, which provide more opportunities for individuals to earn an income and lift them, their families and communities out of poverty.

A lack of a consistent access to reliable power costs businesses and the economy as a whole. Even with access to energy, unreliable power makes operating a business even more challenging than usual.

Nigerian business and manufacturing enterprises experience power outages. As a result, firms lose sales revenues in the informal sector. Where back-up generators are limited, losses can be as higher. These losses have severe consequences for the health and growth of the wider economy, not to mention the dramatic impact in achieving other development objectives outlined by the sustainable development goals (SDGs).

Owners of small businesses in Nigeria seem to have adapted to the poor power and epileptic power supply in the country as they have resorted to alternative forms of getting electricity to power their businesses.

Those that suffer most now are the SMEs and the micro operators that rely on generators, more so now that the fuel is not even available, their problems have been compounded. With a remarkable increase in operational cost and poor purchasing power of consumers, the manufacturing companies have had to lay off thousands in the last six months, with about three million still to go.

A 2015 report of the Good Governance Initiative (GGI), a non-governmental organization advocating uninterrupted power supply in the country, says Nigerians spend N3.5 trillion on fueling their gen­erators annually. The rough business climate has forced many companies to close shops, while the sur­viving ones are retrenching workers daily. Owners and operators of small businesses and large corporations in various sectors of the economy who I was able to speak whit said that the worsened power supply and scarcity of fuel had further exacerbated the ease of doing business.

The development of renewable energy is the key to the development of any nation. Since energy has been regarded by many economists and many researchers as the engine that drives the economy of a nation, investment in renewable energy is therefore paramount for any nation to develop.

There are many solar power advantages worth noting. In no particular order (well, perhaps simply the order in which they come to mind), here are some of the top advantages: Solar power helps to slow/stop global warming. Global warming threatens the survival of human society, as well as the survival of countless species. Luckily researches have led to solar panels that create electricity without producing global warming pollution. Solar power will save SMEs billions of naira.

Within the coming decades, global warming is projected to cost society so much money if left unabated. So, even ignoring the very long-term threat of societal suicide, fighting global warming with solar power will likely save society Nigerian SMEs millions of naira monthly.

Solar power saves you money. The installation may be expensive but in the end, it is cheaper. Solar power provides energy reliability. The rising and setting of the sun are extremely consistent all across the world. Solar power provides energy independence. Similar to the energy security boost, solar power provides the great benefit of energy independence. Again, the “fuel” for solar panels cannot be bought or monopolised. It is free for all to use.

It is with no doubt that the only solution to Nigeria’s epileptic power problem and how it causes great loss to both small and medium enterprises is for individuals and the Nigerian government to invest in renewable energy such as solar panels.

The way forward for both SMEs and the government is to invest in pay-as-you-go solar option which enables all shop owners and also business owners to have 24 hours uninterrupted power supply and in turn, it will increase productivity and raise the living standard of all SMEs operators in Nigeria.

Jonathan is a IP/programme assistant, Climate Transformation and Energy Remediation Society. You can reach him at jonathan.ugbede@Climatters.org

About Lanre Oyetade

A multiple award winner in Economics and business journalism, Lanre Oyetade has served close to two decades in the media industry, spanning different notable stables, where he is privileged to have risen to the position of a title editor.
A masters degree holder in Economics from the University of Lagos and doctoral student at the Babcock University, he is a winner of the prestigious NMMA Capital Market Award for two consecutive years (2004 & 2005), and was also a nominee for the body’s banking and finance and money market awards for two years.
In 2013, he also won the Most Outstanding Business-Reporting Title Editor award of the National Institute of Marketing of Nigeria (NIMN).
A minister in the LORDS’s vineyard, he has been an inspirational speaker and resource person at many corporate and religious fora since early 2004, and has so far authored three books on the capital market; on personal effectiveness, and on personal finance, in 2008 and 2014, respectively.

HUMAN INTEREST

About Us:

T & T News (timetestednews.com) is published by T & T Media Limited.
We pride ourselves with the provision of timely information in news, incisive features, analyses, opinion articles and inspirational
materials, which our various readers and stakeholders can relate to, use, and trust on a daily basis for their personal, professional and corporate development.